French political debate over public debt management

Political debate has intensified in France regarding the management of the nation’s public debt, which reached 3,536.1 billion euros, or 117.5% of GDP, by late March 2026.

Jean-Luc Mélenchon has proposed either ‘freezing’ or canceling public debt held by the European Central Bank (ECB) within the Eurosystem. His proposal to cancel a portion of the debt—specifically suggesting the erasure of between 600 and 635 billion euros—aims to shield the nation from market volatility and prevent private creditors from influencing policy. Proponents argue that erasing debt held by central banks could potentially free up approximately 3,000 billion euros in investment capacity across Europe for objectives such as the ecological transition.

However, the proposal faces significant legal and economic criticism. Economists note that such a move cannot be decided by France alone; it would require consensus at the Eurosystem level involving the ECB and other national central banks. Joachim Nagel, president of the Bundesbank, has opposed the proposal, stating it would ‘contravene European treaties.’ Critics also warn that the benefits might be illusory, as the state could lose central bank dividends or face the need for recapitalization. The debate underscores growing concerns regarding rising interest rates and the cycle of borrowing to refinance existing debt as the 2027 presidential election approaches.